lot more on the line; second, they don’t have the broad experience
that you have seeing how these things go, seeing how minor
bumps in the road get smoothed or seeing how major bumps in
the road sometimes look minor early on. For a client, this is often
the first and only time they have ever done something with huge
repercussions for their lives. No wonder they think irrationally.

So how can agents incorporate these insights towork more e;ectively with anxious clients? Youanticipate and understand that this is going to happen. You resistthe urge to roll your eyes [and wonder], why in the world don’t theysee it as clearly as I do? It’s probably useful to sit down and thinkabout the problems that they are likely to experience. Psychologyand behavioral economics gives us a host of them. For some reason,people who own a house think it is worth more than people who wantto buy it. Now, this isn’t just posturing in negotiations; it’s not just thatsellers ask for more and buyers o;er less and they’re trying to meetin the middle. We know from lots of research that people truly believea property is worth more if they’re selling it and less if they’re buyingit. This is easy to demonstrate. You can do this in a classroom. Youhand out co;ee mugs to half the students and you say, “This mug isyours. Now, what I want to know is the lowest price you would take tosell it to somebody on the other side of the room?” You ask the peoplewho didn’t get a co;ee mug, “You didn’t get a mug. I want to knowthe highest price you would pay to get oneof those co;ee mugs?” When you look atthe average of these two numbers, theyare nowhere near close. It’s a $5.00 co;eemug and what you will find is that sellersgenerally will accept no less than $7.00 forit and buyers will pay no more than $3.00.

Clients

Daniel Gilbert
Harvard psychologist

You can help quell irrational thinking that prevents
buyers and sellers from getting what they truly want.